Graduate Employment in the UK: An Application of the Gottschalk-Hansen Model

There is an apparent inconsistency in the existing literature on graduate employment in the UK. While analyses of rates of return to graduates or graduate markups show high returns, suggesting that demand has kept up with a rapidly rising supply of graduates, the literature on over-education suggests that many graduates are unable to find employment in graduate jobs and the proportion over-educated has risen over time. Using a simple supply and demand model applied to UK data that defines graduate jobs in terms of the proportion of graduates and/or the graduate earnings markup within occupations, we find that the employment of graduates in non-graduate jobs has declined over time. Hence, there is no evidence of an over-production of graduates in the UK.employment, wages, education, graduates

The Changing Wage Return to an Undergraduate Education

Between 1990/91 and 2000/01 the number of male undergraduates in Britain increased by over one-third while the number of female undergraduates has increased nearly twofold. Given this substantial increase in supply we would expect some impact on the wage premium for recent graduates unless demand has shifted in parallel. Following Katz and Murphy (1992), we adopt a simple supply and demand framework to analyse changes in earnings mark-ups across degree disciplines over time. Using a propensity score approach to match those graduates entering the labor market with an age balanced sample of individuals with two or more A-Levels from the Labour Force Survey, we find a significant decline in the markup for females, whilst no such change is apparent for males. These aggregate figures, however, mask a great deal of variation across degree subjects, with declines in those subjects in which women predominate and in the lowest quartile of the earnings distribution being identified. The results point to both supply and demand factors impacting on the graduate mark-up as theory would suggest

Rates of return to degrees across British regions

Earlier papers have found considerable heterogeneity in the returns to degrees in relation to subjects of study, degree classification and higher education institution. In this paper we examine heterogeneity of returns across British regions using the Labour Force Survey. We find substantial variations in the financial rewards available to graduates across regions with much higher returns in London and the South East than elsewhere, although adjusting for regional differences in the cost-of-living narrows such differences considerably. Decompositional analysis, after controlling for regional differences in both occupational and industrial structures, suggests that coefficient effects dominate composition effects, consistent with agglomeration effects being important. These results have implications for the recent changes to student funding in England, Scotland and Wales

Too Many Graduates? An Application of the Gottschalk-Hansen Model to Young British Graduates between 2001-2010

There is an apparent inconsistency in the existing literature on graduate employment in the UK. While analyses of rates of return to graduates or graduate mark-ups show high returns, suggesting that demand has kept up with a rapidly rising supply of graduates, the literature on over-education suggests that many graduates are unable to find employment in graduate jobs and the proportion over-educated has risen over time. Using a simple supply and demand model applied to UK data that defines graduate jobs in terms of the proportion of graduates and/or the graduate earnings mark-up within occupations, we find that there has been a shift in the likelihood of young British university graduates being employed in non-graduate jobs in the recent years of our analysis. This finding is in contrast to existing studies

The Return to a University Education in Great Britain

In this paper, we estimate the rate of return to first degrees, masters degrees and PhDs in Britain using data from the Labour Force Survey. We estimate returns to broad subject groups and more narrowly defined disciplines, distinguishing returns by gender and attempting to control for variations in student quality across disciplines. The results reveal considerable heterogeneity in returns to particular degree programmes and by gender, which have important policy implications for charging students for the costs of their education

Job Mismatches and Labour Market Outcomes: Panel Evidence on Australian University Graduates

The interpretation of graduate mismatch manifested either as overeducation or as overskilling remains problematical. This paper uses annual panel information on both educational and skills mismatches uniquely found in the HILDA survey to analyse the relationship of both mismatches with pay, job satisfaction and job mobility. We find that overeducation and overskilling are distinct phenomena with different labour market outcomes and that their combination results in the most severe negative labour market outcomes. Using panel methodology reduces strongly the size of many relevant coefficients, questioning previous cross-section results and suggesting the presence of considerable unobserved heterogeneity which varies by gender.overeducation, overskilling, wages, satisfaction, mobility

Should I Stay or Should I Go? An Investigation of Graduate Regional Mobility in the UK and its Impact upon Early Career Earnings

This paper uses HESA data from the Destination of Leavers from Higher Education survey 2003/04 to examine whether more mobile students in terms of choice of institution and location of employment earn more than those who are less mobile. The clear finding is that mobility is associated with superior earnings outcomes, but principally through mobility as it relates to students extending their horizon of job search. A bivariate probit analysis also confirms that there is a positive relationship between regional mobility both in the choice of attending university and the choice of where to take up employment

Graduate employment in the UK: an application of the Gottschalk-Hansen model

There is an apparent inconsistency in the existing literature on graduate employment in the UK. While analyses of rates of return to graduates or graduate markups show high returns, suggesting that demand has kept up with a rapidly rising supply of graduates, the literature on over-education suggests that many graduates are unable to find employment in graduate jobs and the proportion over-educated has risen over time. Using a simple supply and demand model applied to UK data that defines graduate jobs in terms of the proportion of graduates and/or the graduate earnings markup within occupations, we find that the employment of graduates in non-graduate jobs has declined over time. Hence, there is no evidence of an over-production of graduates in the UK

Job mismatches and labour market outcomes: Panel evidence on australian university graduates

The interpretation of graduate mismatch manifested either as overeducation or as overskilling remains problematical. This paper uses annual panel information on both educational and skills mismatches uniquely found in the HILDA survey to analyse the relationship of both mismatches with pay, job satisfaction and job mobility. We find that overeducation and overskilling are distinct phenomena with different labour market outcomes and that their combination results in the most severe negative labour market outcomes. Using panel methodology reduces strongly the size of many relevant coefficients, questioning previous cross-section results and suggesting the presence of considerable unobserved heterogeneity which varies by gender

The problem of overskilling in Australia and Britain

This paper examines the parallel trends in education and labour market developments in Australia and Britain. It uses unique information in the WERS and HILDA surveys on reported overskilling in the workplace. To a degree, the overskilling information overcomes the problem of unobserved ability differences and focuses on the actual job-employee mismatch more than the conventional overeducation variables can. The paper finds that the prevalence of overskilling decreases with education at least for Australia, but the wage penalty associated with overskilling increases with education. Although the general patterns of overskilling (prevalence and penalties) are fairly similar between Australia and Britain, the problem appears to be greater in Britain